CHAPTER ONE
Introduction
1.1 BACKGROUND OF THE STUDY
The well-being of every financial system has a crucial part to play in the country (Das & Ghosh, 2007) as its failure can throw into disorder economic development of the country. The banking industry has been globally subscribed to play a catalytic role in the activity of economic growth and development (Uwuigbe, Uwuigbe & Daramola, 2014). This acceptance is strengthened and fortified by modern approach to the effect that banks are authentic mediums transporting resources (funds) from surplus units and moving them to deficit units.
Stakeholders have shown interest on the situation of this significant part of the economy. In recent times, financial institutions are going through swift and multiple competition as well as swift changing in business environment. The competition is tougher due to more nonfinancial institutions that function more in specific sector also increase. Additionally, service sector has therefore been the biggest sector that experience changes as the result of fast change seen by other factors (Lovelock, 2004). To maximize market share, Komunda & Oserankhoe (2012) maintain that companies must make sure customer satisfaction through counter-measures before sales, during sales and after sales. According to Gruber (2011), one of the most important counter-measures companies should embrace is customer service, for which customer complaints management is a censorious part.
Customer complaint defines customer’s expression of discontent and disappointment towards a product, service or purchasing situation (Nakibin et al., 2011). Tronvoll (2012) says it a formal or informal customer report that has to do with an issue with a product or service. Research has shown that, the way complaints are taken care of can heavily affect a company’s business success in the long term (Robert-Lombard, 2011). Gelbrich & Roschk (2010) content that poor complaint handling procedures can to a great extent damage company-customer relationship and lead to customer dissatisfaction. It could also encourage negative word of mouth advertising causing potential customers to withdraw from doing business with the company. It could cause low customer loyalty and significantly no chances of customer retention. Awara (2010) opines that poor customer complaints handling eventually cause companies to lose customers thereby losing market share, whilst the recruiting of new customers through marketing promotions cost money, effectively shrink company profitability and sales performance.
Customer’s expectation in the post-consolidation era of the Nigerian banking sector is very high. This gives ground to the belief that the movement had forced out armature and unprofessional banks and left only those ones which are able to compete in both domestic and world market place. Howbeit, recently, a number of the Nigerian banks have fallen victims of this expectation (Farayibi, 2016). He noted that customers have encountered challenges varying from delay transaction notification, stock out, non- availability of staff at service points, unprofessional conduct or rude behaviours by the staff of the banks, poor standard of records or improper information, failed promises and a host of others. Ogunnaike and Ogbari in Farayibi (2016) posited that customer service in Nigerian banking industry can be mistaken to mean customer delay and frustration. Almost every Nigerian bank goes through the same challenge in meeting customers’ expectations of services and customer satisfaction. According to them, the problem of delay in posting transactions such as money transfer and payments made between customers is a vital problem that customers of Nigerian banks have been subjected to experience. In most cases the customer hardly receives the notification that an account has been credited or debited instantly. The account holder may have to wait till ages before seeing the notification or in worse cases may have to go to the bank to confirm such transaction.
1.2 Statement of the Problem
In real sense, complaints should be seen as a pointer of organizational performance assessment, indicating problems or failures in internal processes that require swift recovery in order to avoid loss of profitable customers which will in turn lead to low sales performance. Organizations must learn that the outcomes of losing customers include both profit decrease and negative word- of- mouth and low sales (Alina, 2012). Although the first law of service quality and productivity is: “do it right the first time”, therefore businesses acknowledged that upgrading service quality is a vital strategy for their success and survival in today’s competitive marketing environment. Parasuraman et al. a good number of organizations cannot object the notion that failures continue to occur, sometimes for reasons outside the organization's control. Presently, banks are focusing on satisfying customers from their unique services, with the growing concern to deliver the best services. No matter how particular bankers may have been, service failures still occur in the form of personal mistakes by the employees; which might be prompted by inadequate training given to frontline staff, lack of experience and inability to meet customer requests efficiently. Besides, the poor technology base of these firms can lead to service failure. These mostly lead to long waiting times and response times, poor attention to customers, unprofessional and impersonal interactions with customers, failures of automated teller machines (ATM), and network failures, among others. All these affect the service quality of such banks and activate complaint. While banks strive to control these complaints by handling them or responding in different ways, the implications of corporate response styles on marketing performance indicators such as customer loyalty, satisfaction and referral seem to be undermined by the banks, and very scanty research has been published in the Nigerian context. The researchers noticed a research gap from the numerous empirical studies in esteemed journal on the correlation between customer complaint management and sales performance on banks in banking industry. Whether the customer complaint management and sales performance relationship is of any significance to first bank Asaba has gained little or no empirical evidence in the literature. This study, thus aims to investigate how customer complaints management in this context affects the performance of the various banks as perceived by the customers, using first bank Asaba as case study.
1.3 Objectives of the Study
The major objective of the study is to investigate the role of customers’ complaints management in the sales performance in the banking industry, a case study of First Bank Asaba, Delta state. The specific objectives include to:
1) Measure how ease of complaints lodging (accessibility) affects sales performance of banks in First Bank Asaba Delta state.
2) Examine the effect of swift response to complaints (responsiveness) on sales performance of banks in the banking industry.
3) Determine the effect of adequate service recovery after complaint (integration) on sales performance of banks in First Bank Asaba.
1.4 Research Hypotheses
Ho1: There is a significant correlation between ease of customer complaints lodgment (accessibility) and sales performance in the banking industry.
Ho2: Swift response to customer complaints (responsiveness) has significantly affect sales performance of First Bank Asaba.
1.5 Scope of the Study
The study covers First bank Asaba, Delta state. The unit of analysis is the customers of First bank. Customers were chosen in the present study given the need to explore the relationship between complaint management and marketing performance from the lenses of bank customer.
1.6 Significance of the study
This study will look intensively on the role of customers’ complaints management in sales performance in the banking industry (a case study of first bank Asaba Delta State). It will be beneficial to stakeholders in the educational sector such as teachers, parents, students, school management, and ministries of education, educational researchers, and the society at large.
This study is essential for several reasons: It contributes to an understanding of the current state of the banking sector in the country, providing insights into whether the role of customers’ complaints management has positively or negatively impacted the sales performance of banks in Nigeria. The study sheds light on the specific impacts of good and poor customers’ complaints management on Nigerian banks. The study can serve as a valuable resource for students, scholars seeking to research more on the topic in question. The recommendations in the study will enhance good banking practices.
Similarly, it is hoped that the results of this study will provide an insight to Nigerians banks to improve sales performance in banks.
